In Massachusetts, residential rentals are highly regulated. To do it by the book, you need to have a non-discriminatory tenant finding procedure, an apartment that meets requirements for the sanitary code, no lead-based hazards, and a rental agreement that could stop bullets. You also need to have a nice place, an attractive ad, a responsive person on your end of the phone, and someone to show the place to prospectives. So how much does it all cost?
I recently tried to answer this question by tracking my time as I went through the whole process myself, from explaining the move-out procedure to the current tenants to welcoming the new tenants and opening their security deposit account. The goal was to rent a three bedroom apartment. The rent was at or below market. The advertising started off-season in February. Here’s what it looked like (these are scanned excerpts from the paper log that I kept):
The total time from February 2 through when I opened the new security deposit account on February 26 was 47.3 person-hrs. Basically, add up the times in red, and if I had to have someone helping me (like on February 6) count that time twice.
- February 2:
- First of all, note that regular landlording stuff is not separated out, like when I dealt with a 3am emergency call about a neighborhood disturbance. That almost never happens, but I left it in for color.
- Craigslist is great. It saves your ad from the last time you posted, so it took me about 18 minutes to check it over, tweak it, and get it listed again.
- Nothing interrupts your day like calls about an apartment. The average call lasts just a few minutes while I collect pre-screening info. You can see that on the day I posted my attractive ad, I started getting calls immediately, from 9:30 to 10:12, and so on, and again on the 4th, the 5th, and so on. The true cost is more than just the phone time because it interrupts what you were otherwise doing.
- February 4:
- It took me about two and a half hours to get my lease agreement up-to-date. The changes I made were things I had queued up from my reading and my learning best practices from my property owners association, and also from some changes in the law.
- Starting this day, it took me about five hours spread out over several days to repair some wall damage to the otherwise pristine apartment. Don’t let tenants put stickers on the walls.
- February 6: The final deleading inspection for this unit and one other (the work for which was completed before tracking began) took two people nearly four hours. All totaled the deleading cost me well over the $1,500 tax credit for this unit.
- February 12: Starting here, I spent about three hours reviewing tenant applications. (I also experimented with a wireless doorbell that I ended up returning.)
- February 16: Here’s when I made the decision to rent to one set of prospectives. Note that I also had to buy a change of locks and make a repair to the rear exterior door jamb.
- February 20: Having made the decision to rent, I went on landlord vacation. I dealt with about 18 minutes of calls while “off duty.”
- February 25: I spent almost three hours split between the previous tenants (itemizing their security deposit deductions) and the new tenants (explaining the rental agreement).
- February 26: My bank was terrible that day. It took me almost two hours to see someone and then set up a new security deposit account.
- February 27 and 28: I guess I didn’t write down what I did here. Just another 1.6 hours somewhere…
Fortunately, any given apartment isn’t likely to be vacant in a month, but when it is, you can expect to pay quite a lot to do it “by the book.” If I paid an employee to do all this at $22/hr, that’s $1,040, or by orders of magnitude, a month’s rent. So that’s where a property manager’s fee goes. Plus I had the added non-recurring expense of a deleading, plus the lost income.
So when you do get a tenant, be good to them and hope they stay a while.